Arc System Works has made a name for itself by almost single-handedly keeping the 2D fighting genre a going concern -- particularly in the West, where SNK Playmore's King of Fighters series has never quite caught on. There's much more to the company than that, however. Following an interview on the developer's game design philosophies, Gamasutra had a chance to sit down with game director Takeshi Yamanaka and producer Kouki Sadamori at Arc System Works' Yokohama headquarters for a discussion on the business direction the company is going. With recent expansions out of the fighting game genre and onto the Nintendo DS with casual games and RPGs, the company has been testing the waters for new forms of gaming. But this interview also reveals that it frequently creates uncredited games for other publishers in yet more genres -- keeping the business solid but keeping its name hidden outside of its mainline series. For these insights and other hard facts about one of Japan's most interesting self-sufficient development companies, read on. For more about the company's development concepts and ideals, read our recent feature-length interview. So, what games are you making now? Takeshi Yamanaka: I'm currently in charge of a 2D fighting game called BlazBlue. Kouki Sadamori: I sort of keep an eye on everything, actually. BlazBlue is the first 2D fighting game you guys are doing in HD. In terms of production, I would think that making a fighting game in HD takes a lot more work than in standard definition. How did that affect the planning process? TY: Well, it definitely requires more time and the technology is more expensive, but other than that the process is fairly similar. KS: Yeah, getting funding together for an HD project is probably the biggest hurdle. TY: But there is actually a lot more effort required in bringing a 2D game that's normally done in SD into HD. In the case of BlazBlue, because we want to get every last detail just right, and because the graphics can be so accurate, there's about three or four times the amount of work to do. That's the reason there's so much more money, time, and people needed to make the game. Which market is BlazBlue more directed at, the arcade, or the console market with the 360 and the PS3? KS: We're actually still looking into the possibility of bringing the game to the home consoles. Arcades, which we call game centers, are still a pretty viable market here in Japan, so there's a feeling among designers that if the consoles take over completely, people will stop going to the arcades. Because we want people to play the arcade version, we can't always announce that we're working on the home version at the same time. TY: Right. For example, with the Guilty Gear series, the support we've gotten from the arcade fans has been crucial to its ongoing success, so we want to make sure we continue to cater to that market. This doesn't mean we're ignoring the 360 and PS3 user base. We want our games to be something people can just pick up and play at home, but first and foremost, our allegiance is to the arcade fans and market. KS: Also, with the 360 and PS3, we don't necessarily value one over the other, but instead think of them as equally important players in the home market. Sony and Microsoft are both important business partners to us. Originally, Arc System Works was known as a fighting game company, and things really got going with Guilty Gear, but it seems like things are more diverse now. There's the DS game line, which seems to include things in different genres, and then the fighting game line which seems to be more hard core. Can you talk about the strategy there? KS: Arc is really a company that was built around our first hit game, Guilty Gear, which was directed at hardcore gamers. Our success with this series really gave us a strong fan base to work with. We've realized we can't put all our eggs in one basket though, so we've been looking into a variety of other genres such as adventure, casual titles, and games directed at kids. We're in the process right now of coming up with new ideas and pursuing those that seem the most promising. TY: I guess to put it simply, competitive fighting games have made us what we are today, and we plan to continue with that of course -- to hold on to our core audience. But we know that to survive as a company, we'll need to branch out and learn to make other sorts of games at the same level of quality. And that's where we're at now, it's sort of an experimental time for us. Just like Mr. Sadamori said, we're looking at bringing out titles directed at kids, more casual titles, even strategy RPGs, adding to our repertoire bit by bit. Once we've made some progress with this, and can figure out which non-fighting games our fans enjoy most, we'll likely make that sort of game our secondary specialty. Are the teams that work on your fighting games, and those who work on your DS games made up of the same people? KS: No, the people who work on the fighting games are on their own team, and we have a team dedicated to our more casual games as well. Come to think of it, there's also a team specializing in games with 3D graphics. I'd say there are about 4 distinct teams within the company. Are the developers working on your casual games people who have been with Arc for a long time, or have they come from other companies specializing in those sorts of titles? KS: We've gathered people together from all over the place, really. Some we recruited from other companies, and some are our younger employees who got their start at Arc. Do you recruit people who have worked on the sort of games you're interested in making at Arc? KS: Not really. Like I said, we're trying to expand our scope so... Like you, Yamanaka, you came from... TY: Right. We don't simply recruit from within the game industry, but have tried to build a staff gathered from a variety of places. We'll assign new employees to a DS project, or something for the PSP. If they come to us with more experience, we'll start them on a more major title, like BlazBlue. KS: What we don't do is cherry-pick people or try and lure them away from their jobs to come work on specific projects for us. Does that mean ideas for new games in your company come from the bottom up, or from top down? KS: It's sort of hard to say, because it's both, actually. Junya Motomura: Like Guilty Gear originally came from the bottom up as Mr. Ishiwatari really wanted to make it, but most of the other projects start from the top and work their way down. KS: BlazBlue and Guilty Gear are both ideas that started in the lower ranks of the company and moved up. JM: Mostly, it's the ideas for the fighting games that come from the bottom up. I can see that. It's very obvious with this game that it has a unique style and is very inspired, but developers are hardcore gamers themselves, and they often don't have the same inspiration to make casual games. Is that a problem, or do you find you have people who are inspired to make casual games? KS: Coming up with quality ideas for casual games can be really difficult. One reason for that is that the budget and scope of smaller projects is usually set in advance by people at the top of the company, which can limit what a team is capable of doing. Arc System Works publishes its own games, but do you also develop games for other publishers? KS: Yes, we do both, actually, operating as sort of an OEM when we make games for other publishers. We've found that creating games for other companies is a really reliable source of income, so we try and get involved with at least two big titles that fall into this category every year. Sometimes in Japan, publishers like to keep the people that have developed a game secret. KS: Yeah, we don't run into that too much at Arc. People who approach us, almost always do so because they want a fighting game. So, with franchises we've worked on such as Dragon Ball, though it's not up to us, our clients usually want it to be known that we worked on the game, and they'll ask us to include the Arc company logo on the splash screen. The hope there, is that with our previous experience with fighting games, if people find out we're involved, it will be viewed as a plus. So, in a way, this makes us an exception to the rule. For example, Tose's games are all... KS: Yeah, those are all kept secret. (laughs) Things are really different in America. Why do you think that situation exists in Japan where developers are kept secret? It just seems like a unique thing. TY: This is my own personal opinion, but it comes from publishers having to measure a game's strengths and weaknesses in a very black and white way. For games like Sengoku Basara X, and Fist of the North Star, the fact that Arc and was involved was seen as a potential selling point, so our name appears on the product. In these cases, the decision was made by the people at Capcom and Sega. I also think it's tied to differences in culture between the East and West, and how our respective game industries have developed. Yeah, it can be a little hard to understand, but it is interesting. TY: It's not like things are entirely different, though. For example, with Microsoft's first-party studios like Bungie [used to be], they make sure the Bungie name is clearly visible, as they're the guys that made it. But they also put their own name on it, as if to say, we're the one putting this on the market and we take the responsibility. In that way, their relationship isn't all that different from Arc's relationship to a company like Sega. But isn't it a little ironic? You guys were credited for Sengoku Basara X and Sega's Fist of the North Star, but for games that aren't in the fighting genre, it's funny that they'd think the Arc System Works name isn't good to say. KS: It does happen a lot, that's true. Our name doesn't appear on most straight forward action titles we've worked on. I actually bought Fist of the North Star myself. I'm not really a fan of the anime, but picked it up as I knew Arc System Works had been involved. If Arc's involvement had been kept secret, I wouldn't have known to buy it. KS: If a publisher is going to hire someone to make a 2D fighting game in Japan right now, Arc is probably the first company they'll think of, but when it comes to other genres, unfortunately, we just don't have that all-important track record working for us. (laughs) It's not that we're hurting for work right now, though. Speaking of secrets, what exactly is the relationship between Arc System Works and Aksys? They're responsible for publishing all of Arc's titles in America, and sort of seem like the same company, but it's not really clear to me. KS: Well, they're a business partner, a company we've got a great relationship with. It's through their help that we've been able to bring our games out in North America. With another company, we'd have to convince them to purchase licensing rights for such and such an amount, and then they'd release the game. You can't really get around that. From our perspective though, we'd want a contract that guaranteed a certain amount of the take from each copy sold, but getting contracts like that can be really difficult. This is where Aksys comes in. Because we work in partnership with them, they're willing to divide the royalties with us on each game sold, instead of paying a lump sum for the right to sell it in the States. We also share the extraneous costs. We handle development and production costs, while Aksys pays for voice acting and localization. It's mutually beneficial, and something that goes beyond a merely contractual relationship. We're both working toward the goal of carving a niche for our games to succeed in the American market. We're in constant contact with them, discussing the best strategies for marketing each new title as they come up. I think all Japanese game development companies hope to break into the European and North American markets, given the relatively small size of the Japanese market. The usual strategy for Wii, Xbox 360, or PS3 games, is to release a straight up action title with HD graphics and hope for the best. For example, Capcom is bringing out games like Lost Planet, a shooter that was targeted specifically at the Western market. Arc System Works really seems to be sticking to their own way of doing things, though. KS: We do have people on our staff who'd like to make games along those lines, as well as customers who'd like to see us give it a try, so the demand is definitely there. It's something we've been looking into and gathering information on, but the size and complexity of the overseas markets can be overwhelming. 2D fighting games are our flagship, the best that we feel we can offer right now. We do have a lot of other work coming in, so I'm sure we'll have chances to get our name associated with some non-fighting games in the future. If we can build a reputation for ourselves in other genres, we'll have a base to work with. TY: Right. That may mean working on some projects in those genres that our name doesn't appear on first. We're doing a number of things like that right now. KS: The point being, we're keeping ourselves busy, and the games have been selling. (laughs) Also, our core fans in both Europe and America have always stuck with us, so it's not as if there is no demand for our games abroad. One issue we've been facing though, is a reluctance for companies like Microsoft and Sony in America to get involved in 2D games. Battle Fantasia didn't see a release for the American PS3. What's the reason for that? Was it Sony's decision? (nervous laughter) KS: That's a tough one to answer... I thought so. I think it's respectable for developers to make the games they want to make as opposed to the games the market might be asking for. That's what I find interesting about Arc right now. KS: Yeah, we're living the dream. (laughs) Well, the company started purely as a development house, and we'd like to keep that as our main focus moving forward. That's not to say we're ignoring marketing, but we have about 90 people in development, and only three -- or is it four now? -- in our marketing department. We really have our hands full planning more casual console titles. I think that's going to be one of the main challenges to come -- striking a balance between the games we most want to make and games it would be smart to make from a market perspective. Tell me a bit about the size of your game teams. For example how many people are working on BlazBlue? TY: There are let's see, 20... maybe 25 people working on it within the company. KS: At the busiest times we've had around 40 people total on the team, but 20 or so is a more average size. We do have more people involved outside the company, however. TY: Yeah, we do have some other companies in Japan who do outsourced work for us. It's popular among American developers now to outsource with people in China and Eastern Europe, as it's cheaper. KS: We actually work with people in China, too. Outsourcing presents its own challenge, with language barriers and so on. Is that a problem at Arc? KS: The Chinese company we work with has helped out on our games since the first Guilty Gear, actually. They've been working with us now for about 10 years, although the first year or so was a bit tough.